Focus of IG investigation now oversees GSA’s IT supply schedule program

Apr. 16, 2013 - 11:16AM
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Former OPM director John Berry is seen in a file photo. (File)

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An ongoing investigation by the Office of Personnel Management’s inspector general into contract steering and wasteful spending raises questions about a former OPM official who left the agency in September 2011 to oversee the General Services Administration’s biggest federal supply schedules program.

The probe found that top OPM officials steered consulting work to prominent human resources expert Stewart Liff, raising broader concerns about the overall procurement practices inside the agency’s human resources services division, according to an interim report by OPM Inspector General Patrick McFarland.

Investigators found that Liff was hired in 2010 and 2011 without competitive bidding through a “pass-through company,” with three task orders paid out on the contract totaling about $450,000.

The OPM report specifically faulted Michael Grant, counselor to the OPM director, and Kay Ely, who was the associate director for OPM’s human resources solutions division.

In a report to then-OPM Director John Berry, who was not faulted in the probe, McFarland wrote that Ely “failed to fulfill her responsibilities as the associate director of the HRS.”

“She not only failed to stop the improper practices through which Mr. Liff was placed with HRS contractors, but she took an active role in ensuring that Mr. Liff received this work.”

In September 2011, two months after Berry asked the inspector general’s office to investigate the Liff hiring,Ely took a new job as director of GSA’s Schedule 70, “the government’s largest contract dedicated to technology and communications solutions.” In fiscal 2012, Schedule 70 was GSA’s biggest federal supply schedule with $15.4 billion in sales, according to Deltek, a market research firm.

Ely did not respond to messages seeking comment on the OPM Inspector General’s findings. GSA spokeswoman Betsaida Alcantara said the department doesn’t comment on ongoing investigations.

“GSA is currently reviewing the findings of the OPM OIG,” Alcantara said.

Liff said in a phone interview that he has no personal relationship with Ely and Grant. But he said OPM got its money’s worth by hiring him. A spokeswoman for OPM declined to comment, referring to a written copy of the agency’s response from Berry.

Berry, who resigned last week, said he was “extremely disappointed” by the findings.

“I am confident that we now have in place a robust set of procedures at HRS that would prevent recurrence of the issues identified in your report,” Berry said in a written response to the report.

Berry also said the preliminary IG report did not appear to find violations of procurement laws or regulations.

But that does not appear to be borne out in McFarland’s report, which concludes that contracting rules were bypassed and that the task orders were awarded improperly.

“The unfortunate outcome was that taxpayer dollars were directed to a specific, favored vendor without the justification required under federal procurement rules and regulations,” McFarland wrote.

Scott Amey, general counsel for the Project On Government Oversight (POGO), a nonpartisan watchdog group, said the steering of contracts puts tax dollars at risk.

“POGO is very concerned with the findings in the IG report and that a government official would so easily transfer to another agency to work on contracts,” Amey said.